PIP COURTNEY, PRESENTER: Even with the high dollar it's been a pretty good couple of years for Australian grain growers. The harvest that wrapped up in southern Australia a couple of weeks ago wasn't a world beater but it came after successive years of record production and exports.

So five years after the abolition of the single desk for export wheat, has deregulation been a success?

Well, as Chris Clark reports, that depends who you ask.

ONSCREEN: Brave New World

(Staccato montage of grain, ports, ships, conveyor belts)

CHRIS CLARK, REPORTER: Exporting bulk wheat is an expensive and risky business, and one of the biggest risks is shipping.

Ships have to be booked months in advance, usually before the size of the annual wheat crop is known for certain. And exporters want to get the wheat shipped as soon as they can, so they compete against each other for port access.

(Grain pours out of a pipe into a huge silo)

CHRIS AUCOTE, AUSTRALIAN GRAIN EXPORTERS ASSOC: It's been the big issue since deregulation has been the fact of port access.

CHRIS CLARK: In Western Australia, the grower cooperative which controls the bulk terminals, CBH, runs an auction system. Shipping slots go in order to the highest bidder.

CHRIS AUCOTE: There's certainly been concerns with exporters about, I suppose, the quantum of money that has to be put on the table from an exporter to actually book capacity through the auction system. Sometimes $20, $30, $40 a tonne, up to 12 months in advance, to try and book that capacity.

And from my point of view, that's not a good way to utilise capital for the industry here in Australia.

CHRIS CLARK: CBH is an exporter too, as well as making money from handling, storing and loading grain for others.

DR ANDREW CRANE, CBH GROUP: There are certain times in the year, certain months, when that is a scarce resource and all of those marketers want a fair and transparent way of allocating that resource. They've clamoured for that. They don't just want a first come first served.

But ultimately, it's a fantastic supply chain asset we have in Western Australia that people wish to use. You can load vessels very efficiently. People attach a value to that and somehow we've got to make that mechanism work.

CHRIS CLARK: While shipping slots are auctioned in the West and in in South Australia, on the East Coast, the dominant bulk handler GrainCorp runs a first in, first served system.

(Aerial shot of a port)

This is their Geelong terminal in Victoria.

GrainCorp also trades wheat but most of its money comes from storage, handling, and finally loading everything from wheat to woodchips and fertiliser.

(Grain pours into a silo)

This is canola, bound for Pakistan.

While first in, first served, is the principle, GrainCorp's allowed to sell some of its capacity up to three years in advance. And there are those in the trade who say that cuts competition by favouring the biggest exporters with the deepest pockets.

ALISON WATKINS, GRAINCORP: I would argue that a large customer - just as I would argue if I were running an airline - a customer who flies with me every week, or a customer who has a huge corporate account with me, I probably do want to be able to give them a certain kind of treatment compared with the small guy.

CHRIS CLARK: But it's not just exporters who have concerns about shipping access. The costs involved in getting port access all add to the risk of doing business. And somewhere along the way those risks have to be priced.

Some growers believe that ultimately exporters offer them lower prices for their grain to offset shipping costs.

ANDREW WEIDEMANN, GRAIN PRODUCERS AUSTRALIA: The port access provisions really only allow a lot of really big players to operate, because of the cost of ensuring you have shipping slots.

And shipping slots purchased one, two and now up to three years out from the harvest means that a lot of companies are at risk, and that risk is also factored into the price that we receive at the other end as well.

CHRIS CLARK: Exporters and bulk handlers have been working on a new voluntary code for port access. But Federal legislation passed at the end of last year now means there's an industry task force which will have to develop a mandatory code.

It's not what exporters or handlers wanted.

DR ANDREW CRANE: I think we're really barking up the wrong tree, that it needs to be mandatory. I think industry, the trade, need to work together to come up with a way of allocating shipping slots. The idea of making it a mandatory and legally enforceable, I don't think adds any value to it.

Indeed, it will probably drive it into a much more complex and legal-based system that probably will be fraught of ongoing claims and counter claims. So a little nervous of that.

CHRIS CLARK: Growers have been divided about the way forward. Some wanted a lighter touch. At the other extreme there were some who would happily have brought back the single desk.

ANDREW WEIDEMANN: What we were being offered this time last year was basically nothing. So the industry was going to be set sail, or it was going to have a voluntary port access code and once the Wheat Export Authority provisions were wound up in 2014, the industry wouldn't have any leverage over the trade to determine or have an independent umpire process.

What we've ended up with is probably more than we were arguing for to be honest. We've had a mandatory code of conduct administered by ACCC, paid for by the taxpayer, and I guess at the end of the day the trade don't like it.

(Cargo train goes through a tunnel)

CHRIS CLARK: Improving port access is only part of what's now being reviewed. Trading grain is largely about knowing what grain there is to trade. So it helps if you own silos and sheds at ports, and the sites up-country where most grain's stored.

In Western Australia, the biggest single export state, CBH controls more than a third of the trade through its own trading arm. CBH's CEO Andrew Crane says that's because they're good at what they do.

ANDREW CRANE: In our case, in WA, those percentages are purely a playout of prices being offered by those operators to the growers and the growers' choice is to market the grain with who they like.

In our case, our own marketing trading business, which is owned by the cooperative, is a very preferred marketing route for our growers. They feel comfortable placing the grain with them, if they're competitive - but when they're competitive they'll sell to their own entity. Because any margin they make comes back into the cooperative.

CHRIS CLARK: It's a similar story for GrainCorp on the East Coast. Controlling the physical infrastructure seems to offer a big advantage.

The four largest exporters of Australian wheat are the four companies which control the ports and storages that were there largely before deregulation, in a system which is meant to offer open access.

Alison Watkins, if this is meant to be open access, the system for grain exports, why is it that those who own the physical assets in whatever state seem to dominate the export trade?

ALISON WATKINS: Well, I think there are many customers who when we talk to them in the Middle East, say, or Asia, who actually really value dealing with the owner of the supply chain because they're very discerning about the kind of quality grain that they want. And if you've got the supply chain network they're very, very confident that you can secure that for them and get it to them.

CHRIS CLARK: Worldwide, the grain trade is dominated by what's called vertical integration. In other words, exporters usually own their own physical storage and handling facilities. Control gives them a marketing edge.

ANDREW WEIDEMANN: We have a position of course where we have three large bulk handlers and they have a monopoly position because they can see all of the stocks right down the supply chain that nobody else can. And that's really frustrating.

And I know that those companies have a major investment in Australian agriculture, and we need that investment in Australian agriculture, but we need to have a fully contestable and transparent marketplace to ensure that growers get maximum value and the Australian grains industry can continue to thrive.

CHRIS CLARK: Much of this was anticipated at the time of deregulation. So CBH in the West has to follow certain rules about keeping its trading arm separate from its bulk handling separations.

Other traders also complain about CBH having its own export arm and saying 'Surely they've got better information, better access to ports than we can get'.

ANDREW CRANE: I can understand levelling such accusations but they're entirely false.

CHRIS CLARK: Well, how do you keep the two businesses separate? How can your trading arm not know more than its competitors?

ANDREW CRANE: By good business practice. We have to meet certain conditions and regulations - separation of information and of businesses, and we maintain that.

CHRIS CLARK: So they get the same information that's available to everyone else?

ANDREW CRANE: Our trading arm are a competitive organisation within CBH, fighting each day for market share. And that's good for our growers.

CHRIS CLARK: Exporters want the bulk handlers to release more information about what stock is held away from the port.

CHRIS AUCOTE: We're advocating that individual stocks at site be published. We're talking an aggregated volume in a zone behind a port.

So let's use Port Adelaide as an example: Then there will be a number published for wheat in that zone behind the Port Adelaide port. And it's an aggregated number that we're talking about.

CHRIS CLARK: How would that help you?

CHRIS AUCOTE: Well, I think at certain points in time it's good to know what is the absolute stock level in a certain location or in an aggregated Australian environment.

CHRIS CLARK: But the bulk handlers don't see why they should give a commercial advantage to their competitors.

ALISON WATKINS: Traders being traders always like to have more information rather than less. And to be honest I'm not apologetic, given the significant investment -over a billion dollars of our shareholders' funds - that we have tied up in concrete and steel at our ports and up-country, that we should be providing information on a whim for free.

I don't think that that's reasonable.

ANDREW CRANE: I'm not sure that growers publishing to the world how much grain is sold and unsold is in their interests - particularly say when they're long-grain and there are large stocks of unsold grain.

That's of great value to overseas buyers to understand the net position of Australia and West Australia. So we wouldn't think that would be in our growers' interests.

CHRIS CLARK: GrainCorp also has a trading business but Alison Watkins says there's plenty of competition out there.

ALISON WATKINS: In fact, I think since the removal of the single wheat desk we now have a very efficient market operating.

We have some 20 exporters using our ports - and those 20 exporters are typically buying grain up-country. So at each of our silos, we'd have say 10 or more buyers vying to buy a grower's grain.

ANDREW WEIDEMANN: We deliver grain to GrainCorp locally and 24 hours later I'll get a text message from one of their divisions essentially asking if I want to sell the price. Nobody else sees that and nobody else can do that because they don't know I put the grain in there.

(Shot of fields of ripe wheat)

CHRIS CLARK: The price growers get for their grain reflects all of the risks taken by everyone in the supply chain, including the end users' view about the quality of the grain.

So if exporters know less than they'd like to know about exactly what's for sale, they will tend to discount their offers to growers since they have to deliver what they promise.

ANDREW WEIDEMANN: When it comes down to that cargo integrity - the out-turn performance - it's been suggested to us that anywhere from $10 to $30 a tonne can be discounted in the market by that particular buyer of grain. And that is obviously money straight out of the grower's pocket.

What we need to do is to ensure that growers get maximum value and at the moment we don't believe they're seeing that.

(Technician weighs and tests grain samples)

CHRIS CLARK: Exporters dismiss that view. But the industry is also debating a small change to quality standards which illustrates a wider point about where growers stand in a deregulated market.

When farmers take their grain to local storages it's measured for all sorts of things - moisture level, protein, and something called its test weight -

TECHNICIAN: Test weight, 83.

CHRIS CLARK: - a measure of weight by volume. The magic number is 74 kg per hectolitre to make milling grade wheat, wheat for human consumption.

Geoff Nalder grows wheat in Victoria's Mallee and is a veteran of industry politics and representation.

MAN: Alright, well let's go and have a look at some. We'll go out to the bin.

GEOFF NALDER: Alright.

CHRIS CLARK: This latest season presented no test weight issues for him. Yields were down, but quality was good.

GEOFF NALDER: Quality's been really good. The test weight issue - about 85kg to the hectolitre on some of our wheat and that's unheard of. I think we're running 80... average over 4,000 tonne a wheat would be 84.

CHRIS CLARK: The trade, meaning exporters, wants to increase the test weight from 74 kg per hectolitre to 76.

CHRIS AUCOTE: Today, the majority of markets for Australian milling wheat operate, you know, at minimum 78, and up to 80kg per hectolitre. So we think in the long run, you want to be able to send the right market signals back to farmers and to the growing community about what the market is actually requiring for wheat.

CHRIS CLARK: The change would only affect around 2 per cent of the crop in a given year, but if you're a grower with wheat in that 2 per cent, you will lose money.

ANDREW WEIDEMANN: From the producers' point of view, all we can see is cliff-face pricing. And cliff-face pricing essentially means that once you fall out of a grade you go down to a lesser price - and that could be as much as $30 to $40 a tonne in some years.

CHRIS CLARK: Chris Kelly from Grain Growers Ltd agrees.

CHRIS KELLY, GRAIN GROWERS LTD: This will not create value for farmers. This will destroy value for farmers.

This could only potentially give traders some access to markets. It's not actually a value-creation move. And I think if the trade GTA could see that it was so value destructive they would not proceed with this.

CHRIS CLARK: Geoff Nalder is the producers' voice in Grain Trade Australia, the trade dominated group that sets this rule. What's his view?

GEOFF NALDER: The real issue is that, will increasing the test weight from 74kg to 76kg actually increase the quality or increase the demand for Australian wheat?

No, it won't.

CHRIS CLARK: So can you see a case for changing it?

GEOFF NALDER: Not at the moment, no.

CHRIS CLARK: Growers were divided over deregulation. Five years later, they're still arguing over who should best represent them.

GEOFF NALDER: Is it going to be NFF that represents the grain producers of Australia? Is it going to be Grain Growers Ltd? Is it going to be Grain Producers Australia?

It needs to be sorted and it needs to be sorted very, very quickly because it's doing us a lot of damage at the moment.

CHRIS CLARK: There's plenty to play for in Australia's evolving grains export market.

CHRIS AUCOTE: I think we've just got to make sure as an industry that we don't create a system that doesn't allow some of the smaller exporters and smaller players to be able to be involved in the market. And I think that's very important.

CHRIS CLARK: The big four who dominate the trade have fewest reasons to change.

ANDREW CRANE: CBH wants to grow a vertically integrated supply chain for the benefit of Australian growers and continuing to try and divide us up...

Of course, competitors may wish to do that, but I don't believe that's in an Australian industry advantage. Cooperatives are very good owners of supply chains.

There's nothing wrong with vertical integration along a grain supply chain. It's in our growers' interests and I won't apologise for it.

ALISON WATKINS: I believe that since the removal of the single wheat desk, we now have a much more competitive environment for growers. We have 10 or more buyers at each of our sites for growers' grain.

But more importantly, we now have contestability at each stage of the supply chain.

CHRIS CLARK: More change is possible. GrainCorp's already been a takeover target for a large North American operator. This is an industry still in transition.

ANDREW WEIDEMANN: If you have a look at the Australian grains industry, the most amount of investment is in from the producers themselves. We would be 10 to 20-fold the amount of investment in our industry than all of these exporters put together.

So I think that that in itself allows for us to start putting some pressure on government, at least from the production sector point of view, to start to address some of these other fundamental problems that we have.

(Harvester moves across a wheat field)

CHRIS CLARK: What happens on the farm is determined by what happens in ports and in the trading houses across the country and around the world.

These are vital questions for everyone in the grain business - with much at stake.